Friday - - Beauty -

Q Chil­dren’s education has be­come quite costly of late. Can you ad­vise how, as par­ents, we can bud­get for our chil­dren’s tu­ition fees? What sav­ing op­tions do we have?

A In­deed, as a par­ent, you al­ways as­pire to give your chil­dren the best, par­tic­u­larly when it comes to education.

School fees dif­fer in the UAE de­pend­ing on the school and cur­ricu­lum pro­vided. There could also be an an­nual in­crease of tu­ition fees based on pa­ram­e­ters and rat­ings set by gov­ern­ing bod­ies of education in the var­i­ous emi­rates. So, one of the first things you would need to do is start fore­cast­ing ahead for your child’s education costs. This will re­duce your worry at a later stage when your child starts higher education.

Ide­ally, your fore­cast­ing would de­pend on your monthly house­hold in­come and, ac­cord­ingly, you can pre­pare your ex­pense sheet. Since education is part of the monthly out­flow, we need to al­lo­cate funds. How­ever, as many schools have quar­terly pay­ments we can save these funds into a short-term in­vest­ment plan.

Sec­ondly, sev­eral banks of­fer zero per cent tu­ition fee plans for six to 12 months when pay­ment is made by credit card. Some of­fer a per­cent­age of cash back on tu­ition fees if pay­ment is made by credit card. Choos­ing such op­tions could ease the stress of quar­terly pay­ment fees.

Over­heads for higher education have been cu­mu­la­tive at a rate of over five per cent a year; there­fore you need to have an education fund that may help tai­lor your fi­nan­cial com­mit­ments as­so­ci­ated with uni­ver­sity needs.

I must stress that fi­nan­cial dis­ci­pline is es­sen­tial and how you plan those sav­ings is im­per­a­tive.

In the UAE, most banks pro­vide education finance – sub­ject to cer­tain terms and con­di­tions – ei­ther to pay for pri­mary and sec­ondary education or uni­ver­sity stud­ies.

It’s al­ways ad­vis­able to in­vest into a sav­ings ve­hi­cle such as Na­tional Bonds or into low-risk mu­tual funds.

You can opt for in­vest­mentlinked in­sur­ance cover to al­low nec­es­sary ac­cess to your funds in a struc­tured way, which also would en­sure your child’s fu­ture education in case of the death of the bread­win­ner.

In­vest­ment into eq­ui­ties or low-risk ex­change traded funds can also be a part of your child’s education plan­ning.

Do proper re­search – as fi­nan­cial plan­ning for a child’s education is about de­sign­ing a long-term ap­proach for your fam­ily.

When fi­nances stay in or­der it gives you peace of mind that plans are on track and it will help shape your child’s fu­ture.

If nec­es­sary speak to a fi­nan­cial ad­viser about cre­at­ing a com­pe­tent fi­nan­cial plan to help to meet education costs.

DHIREN GUPTA man­ag­ing di­rec­tor of 4C Mort­gage Con­sul­tancy, is a fi­nan­cial ex­pert

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